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David Crowther6/24/24

Commercial real estate still under pressure

The boss of the UK’s 3rd largest real estate investment trust (REIT) has warned that UK office values are melting like “ice cubes”, as shorter leases, stricter environmental criteria, and higher tenant expectations weigh on property values. With the rise of remote work, that slowdown is hardly a UK-only phenomenon.

Indeed, commercial property bargain hunters in the US have reportedly been buying office buildings at discounts of up to 70%, as office vacancy rates hover close to 20% in America. That foundational weakness has weighed on real estate stocks, with the XLRE, an ETF designed to track the real estate segment of the S&P 500, down 3% in 2024. That makes it the only S&P 500 sector in the red.

Real estate stocks

Property group boss likens UK office values to “melting ice cubes”

Property group boss likens UK office values to ‘melting ice cubes’Financial Times

Indeed, commercial property bargain hunters in the US have reportedly been buying office buildings at discounts of up to 70%, as office vacancy rates hover close to 20% in America. That foundational weakness has weighed on real estate stocks, with the XLRE, an ETF designed to track the real estate segment of the S&P 500, down 3% in 2024. That makes it the only S&P 500 sector in the red.

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Helena Cheng31m

Equinix drops after Q1 results disappoint and boost to full-year sales guidance falls short of expectations

Equinix is falling in early trading after reporting underwhelming Q1 results.

Revenue of $2.44 billion and adjusted EBITDA of $1.25 billion came in modestly below expectations, and the data center REIT’s full-year guidance wasn’t as sunny as analysts had anticipated.

Management cited strong demand from AI and cloud workloads, record bookings, and a growing backlog in raising its full-year outlook for sales to between $10.14 billion and $10.24 billion. However, the midpoint of that range still falls a little short of Wall Street’s $10.22 billion estimate.

The data center REIT had surged about 42% year to date going into earnings, making it the top performer in the S&P 500 REIT industry group. After outperforming peers by more than 30% in 2026, it seems investors had little appetite to forgive any missteps.

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Hertz surges after announcing autonomous fleet partnership with Uber

Hertz is up over 15% in premarket trading Thursday on news that its affiliated operating company, Oro Mobility, is partnering with Uber to manage autonomous vehicle fleets. That means Oro will support Uber’s autonomous Lucid robotaxis with “charging, maintenance, repairs, cleaning, and depot staffing” in the San Francisco Bay Area later this year.

The deal also expands into driver-led fleet operations, with Oro operating vehicles — and in some cases employing drivers — on Uber’s platform, a shift toward more centralized, fleet-based ride-share models.

Uber, which exited developing its own robotaxi technology in 2020, has recently positioned itself at the center of the robotaxi push through partnerships.

Hertz and Uber Partner to Power Autonomous Robotaxi and Driver-Led Fleet Operations

The deal also expands into driver-led fleet operations, with Oro operating vehicles — and in some cases employing drivers — on Uber’s platform, a shift toward more centralized, fleet-based ride-share models.

Uber, which exited developing its own robotaxi technology in 2020, has recently positioned itself at the center of the robotaxi push through partnerships.

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Blue Owl jumps after posting better-than-expected Q1 fee-related earnings

Blue Owl Capital shares rose around 5% premarket after the company reported Q1 results that signal its broader business is resilient in the face of some stress in private credit markets.

The key numbers:

Assets under management of $314.9 billion (estimate: $315.4 billion).
Fee-related earnings of $393.6 million (estimate: $383.5 million).

Ahead of earnings, analysts flagged expectations for a softer quarter driven by weaker fundraising and elevated redemptions, particularly in Blue Owl’s retail-focused private credit vehicles. Those funds have been a key growth engine but also a pressure point as investors seek exit liquidity that the asset manager has been unwilling to provide in full. Based on the reaction, much of that concern may have already been in the price.

Shares of the stock have slumped more than 40% year to date, with Blue Owl emerging as a proxy for broader concerns across the $1.8 trillion private credit market. Redemption requests have surged in recent months, at one point exceeding 40% in one fund and more than 20% in another, forcing the firm to gate withdrawals and sell assets to return capital.

The pressure has also been amplified by the firm’s exposure to software borrowers, where investors are increasingly questioning how AI could reshape the industry’s earnings durability and loan performance.

During Blue Owl’s February earnings call, however, co-CEO Marc Lipschultz said there were no “red flags” or “yellow flags” in its tech portfolio.

Judging by the price action in recent months, and what its peers are saying, that statement might be overly optimistic. Earlier this week, publicly traded private credit fund Ares Capital Corp marked down the value of loans to three software businesses by up to $0.18 in its Q1 report, which helped push net unrealized losses up to $357 million.

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US national average gas price has jumped to $4.30, according to AAA, the highest level since July 2022

On Thursday morning, the American Automobile Association (AAA) reported that the national average gas price in the US had risen to $4.30 per gallon — the highest level seen since July 2022 — as the global energy crisis continues to trickle down to consumers.

The fresh pain at the pump comes as more oil supply disruptions in the Middle East continue to drive up Brent crude prices, where front-month futures contracts just hit a four-year high, with the international benchmark briefly topping $126 a barrel. Unsurprisingly, if that level holds, it would be hard to foresee gas prices going anywhere but further up, given the two are so intrinsically linked.

Gas Prices Crude 04/30 — Sherwood News

With the Strait of Hormuz likely to remain blockaded as a result of the ongoing conflict, analysts are predicting that the national average gas price could hit $4.50 per gallon in the next week or two. Indeed, Gas Buddy’s Patrick De Haan forecast prices reaching as high as $5 a gallon by Memorial Day, and up to $6 a gallon by later in the summer, saying, “Nothing’s impossible at this point.”

However, according to AAA data, gasoline prices have already topped $6 a gallon in California, marking the highest level since October 2023. For context, no other state has ever surpassed the $6-a-gallon mark, with Bloomberg reporting that the price in the state was $4.64 a gallon at the outset of the war.

Mounjaro KwikPen Photo Illustrations

Lilly beats Q1 estimates and raises full-year guidance

The company reported earnings results before the bell on Thursday.

J. Edward Moreno3h

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